USDA funding may not run out after all – HR 5017 passed today

HR 5017 passed

Today, the Kanjorski bill (HR 5017) passed unanimously in the House Financial Services Committee, a bill aimed at supporting the rural housing market that has struggled to get passed. HR 5017 also known as the Rural Housing Preservation and Stabilization Act of 2010 will end the current method of using federal funding to backstop the guarantee, but instead will fund the program through mandatory fees.

HR 5017 ensures rural homebuyers access to affordable loans through USDA, but because these loans have tripled since 2006, federal funding will be running out literally in the next few days, making passage critical.

Pennsylvania Congressman Kanjorski said, “At no cost to taxpayers, [the Kanjorski] bill will preserve the access of millions of families living in America’s heartland to needed USDA loan guarantees, so that they can continue to buy homes with affordable mortgages. Without action, too many families in rural America will have no options for getting home loans. We cannot allow that to happen.”

In order to pay for the program, lenders will pay up to a 4% fee on new home mortgages. Next, the bill moves to a House vote.

In a House press release, homeowner Virgie Spruiell from Pennsylvania said, “As a result of this program, I was able to purchase my first home which I have wanted all my life. I enjoy it every day and it is a blessing. I greatly appreciate Chairman Kanjorski’s efforts to enable the program to continue so that other people can access these guaranteed home loans just as I did.”

CC Licensed image courtesy of theqspeaks via Flickr.com.